BRETT STEENBARGER'S TRADING PSYCHOLOGY RESOURCE CENTER

Below are resources to help traders become their own trading coaches, improve their trading processes, and develop a positive work-life balance.  All the TraderFeed posts also contain links to valuable resources and perspectives.  

RADICAL RENEWAL - Free blog book on trading, psychology, spirituality, and leading a fulfilling life

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The Three Minute Trading Coach Videos

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Forbes Articles:

https://www.forbes.com/sites/brettsteenbarger/
  

My coaching work applies evidence-based psychological techniques (see my background and my book on the topic) to the improvement of productivity, quality of life, teamwork, leadership, hiring best practices, and creativity/idea generation.  An important part of the "solution-focused" approach that I write about is that we can often best grow by focusing on what we do well and how we do it--and then doing more of what works for us.  The key is to know our cognitive, interpersonal, and personality strengths and leverage those in the pursuit of performance. 

FURTHER RESOURCES

*  A Creative Way to Use TraderFeed 

*  Brett Steenbarger Bio

*  Brett's Books on Trading Psychology

I wish you the best of luck in your development as a trader and in your personal evolution.  In the end, those are one and the same:  paths to becoming who we already are when we are at our best.

Brett
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Lessons From Working At Hedge Funds

 

3/31/2026 - Years of working with top hedge funds and hedge fund managers have taught me how important it is to know--and accept--when you're wrong.  The great traders know that they'll be wrong close to half the time on each directional trade and they accept that in advance.  They plan for being wrong with stop loss points that become automatic exits.  For them, a losing trade is information.  What they expected didn't materialize.  That says something about the market.

But the really great traders?  They are quick to recognize the moment when the market tells them they're right.  In other words, they see in real time that their ideas are playing out and they are quick to get big in those trades.  They know when and how to pounce on opportunity.  They're like the poker player who is willing to muck one hand after another, losing small money, but who will not be afraid to bet big when the odds are on their side.  

The market is always dealing us cards.  The great traders know in advance what they need to see to really go after a clear opportunity.  They plan, not only for stop loss, but for go win.  They blend caution and aggressiveness, like a lion waiting in the brush ready to strike at the right moment.

It's not at all that the best traders win all the time.  They go through drawdowns and periods of flat performance.  It's those few times each year when everything lines up for them that they make their money.  Being prudent and limiting losses is necessary for success; being aggressive and maximizing opportunity is necessary for great success.

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3/30/2026 - Once upon a time, the big innovation at hedge funds was trading as teams rather than as solo portfolio managers.  Teams could manage more money and indeed were self-managing.  The best of the teams, powered by leadership, helped junior members (who typically were analysts) become risk takers/traders/investors.  But now things have changed.

The new teams are much larger and consist of members with a variety of strategies and market specializations.  They act like a trading firm within a trading firm.  Within the team are "pods", where a more senior member is assisted by juniors and helps those juniors develop.  The larger team structure enables the members to keep each other abreast of developments around the world and across markets.  Everyone shares research and insights gained from interactions and observations.  It is an enriched environment.

But now the teams are different still.  They are decentralized, where the pods operate in different parts of the world.  Some team members might be in the U.S., some in London and Europe, and some in Asia.  This enables the big team to stay abreast of global news, data releases, and markets in real time.  Everyone communicates with everyone and--every so often--everyone gets together in one location for bonding and team building.  These teams are quite successful in recruiting talent, because they don't necessarily need traders to relocate.

Smart individual traders can learn from this.  They can team up with other traders with complementary skills and experience, so that each one is learning from every other one.  The team can link with a community and create teams of teams, tracking different stocks/markets/regions of the world and quickly identifying shifts in market themes.  The lesson I've learned from years of work at hedge funds is that the business is always changing and we have to be ahead of the curve with our own evolution.  Spending our time making better horses and buggies will be of limited value when others are developing automobiles.

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3/29/2026 - As I move toward retirement, I look back on my work at multiple large ("multistrat") hedge funds and all the lessons I've learned during that time.  This series of posts will capture some of those lessons.  

The first lesson is that of professionalism.  Once in a great while I've seen portfolio managers puff themselves up, point the finger at themselves, and make it clear to everyone that they're at the top of the world.  I've never seen those managers last.  Rather, the successful managers always feel as though they don't know enough.  They scour for more news, they talk with more colleagues, they perform more analytical studies.  If they feel confidence and conviction, they double down and look for what they might be missing before acting on how they feel.  They invest in themselves, learning new skills, strategies, and markets, because they know that markets are ever-changing.  I see it now in terms of the applications of AI to trading and in new forms of teamwork in trading.  I see it in terms of new and different market research.  

As I write this, the overall stock market is in a downturn and has failed to bounce from short-term oversold conditions.  A few traders I've spoken with have been buying, convinced that this is a time to pick up bargains.  Others, fearful of the situation in the Middle East and the debt overhanging the economy--as well as the deterioration of high-yield markets--have taken a very defensive posture.  One successful manager I've spoken with has gathered decades of market data and  investigated markets in history that have behaved similarly to the current one.  

That manager is not bearish.  That manager is not bullish.  That manager is curious.  Because he learns, he earns.

Positive Training Psychology

 

3/27/2026 - Traders commonly think of markets as either rangebound or trending.  Many trading signals reflect shifts from range mode to trend mode, attempting to catch the momentum of this transition.  

A different way to think about markets is as a combination of short, medium, and longer-term cycles.  Indeed, many commonly used market indicators, such as RSI, attempt to capture such cyclical behavior.  

A big part of the training I've gone through in markets is learning to identify market cycles and their turning points.  From this perspective, a trend is simply the upside or downside phase of a cycle; a range market represents turning phases of cycles.  As John Ehlers has shown, correlation is a trend indicator and a cycle indicator.  When cycles are aligned, we have "trend"; there is high correlation among stocks to the upside and downside.  When correlation begins to come down, we typically are seeing a divergence of cycles, leading to more rangebound markets.

Reviewing markets day after day, identifying the interplay of shorter and longer-term cycles and the rise and fall of correlation, helps us adapt to shifting market conditions.  How we trade strong trends when cycles are aligned and correlation is high is different from how we trade range markets where cycles are not aligned and correlation is falling/low.

The active trader thrives on pattern recognition.  When we think in cycle terms across timeframes, patterns become more than shapes on a chart.  They suddenly make sense.

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3/26/2026 - The guru who will lead you to profitability in your trading can be found within yourself.  This may be the most important lesson in trading psychology and training psychology:

In some ways, at some times, each of us is already the person we wish to become.  The aim of our development is to discover who we are at our best and to be that person more and more consistently.

The path to greatness lies within us, in the actions we already perform greatly.  Our challenge is to figure out where that greatness lies and how we can access it in our relationships, in our work, and in our trading.  The essence of positive trading psychology is to build what is already positive in us and in our trading.

If our trading is to become consistently successful, it has to consistently access the best within us.

I write a blog about cat rescue and the four rescue cats in my home:  how they've gone from homeless and often frightened animals to loving family members who have bonded with each other.  The blog is not written for popularity; it's there to remind me of who I am at my best.  If my trading ignores that reality and becomes all about P/L, I cannot learn and grow.

The best training psychology has to be grounded in the psychology of what we do at our best.  Everything else is distraction.  Be. Your. Own. Guru.

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3/25/2026 - We've seen it in recent markets:  traders have trouble adjusting to markets that display high volatility.  Their training is grounded in a particular volatility regime and they are accustomed to holding positions for a certain period of time.  When volatility expands greatly, there is much more movement during each time period.  Unable to make the adjustment, traders who were doing well in one volatility regime now find themselves whipped in and out of positions.

As I've shared in the past, a breakthrough in my own trading has been to track charts and indicators where each bar represents a unit of volume, not a time period.  Thus, for example, we might draw open/high/low/close candles for each 50,000 contracts traded in the stock index futures.  When markets get busier/more volatile, we draw more bars; when markets slow down, we get fewer bars.  That means that, for a given pattern (such as a moving average crossover), we will get more signals in busy markets; fewer when markets slow down.  This allows us to not get whipped around in the volatile markets, and it prevents us from overtrading slow periods.

For training purposes, we can make use of replay platforms where we can replay a market day bar by bar--and we can change the speed of the replay.  This also helps us to adapt to slower and busier market conditions.  The volume-based bars help us perceive in real time when a market is picking up volume, when buying or selling is drying up, etc.  Those volume bars also help us see how well volume is able to move the market.  Small bars for a given volume unit mean that the volume is not able to move the market very much.  Range expansion on a bar--on a breakout, for instance--tells us that control of the market has changed.  

We achieve a positive training psychology when the patterns we follow make sense to us.  Seeing volume and price interacting in real time trains us to see when control of the market is expanding, contracting, and changing.  Replaying those scenarios again and again is the most lasting way of building confidence and conviction in our trading.

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3/24/2026 - A valuable aspect of the training exercise described below is that, over time, you can categorize market conditions and see how trading opportunities set up in volatile markets, quiet markets, range markets, trending markets, morning markets, afternoon markets, etc.  Just as a general will employ different strategies in mountain warfare than in desert warfare or ocean warfare, we want to be prepared to win in unique market environments.  Many, many times traders fail to perform because they are employing the tactics successful in one environment long after that environment has changed.  Adaptability of mindset and trading style is key to the mastery of the active trader.

Once we have a scheme for categorizing various market environments, we can then review our trading and identify what we do right and what we do wrong in each environment.  By studying winning and losing trades as a function of market condition, we grow our adaptability and create a grounded sense of confidence in shifting market conditions.  

When I first learned trading, I printed out charts of the market and categorized those by market condition, marking up each chart to identify the opportunities and also highlighting mistakes I had made.  I grouped these printed charts by the type of market we were in and, over time, built an encyclopedia of charts to study best trades in each environment.  

Traders who understand market condition and how to adapt to market condition don't go on tilt.  They are prepared.

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3/23/2026 - In any performance field, professionals are always in training.  It is not an activity limited to new, developing performers.  From football teams to musicians, there is always practice and there is always new and different performance.  A trading process without a training process cannot adapt to new markets and conditions.

The exercise I have found most helpful in my development was to track, at the end of each day, the one or two best opportunities in the market I was trading (stock index futures).  I diagrammed and summarized how those best trades set up with respect to time of day, volume, movement relative to moving averages, larger contexts of time frame, overbought/oversold indicators, indicators of supply/demand (such as NYSE TICK), etc.  Day after day, market after market.

Clearly this is training in pattern recognition.  It's a bit like the radiologist reading one X-ray after another with feedback to gain a sense for the nuances of each.  What I found is that the clearest patterns did not necessarily occur at absolute market tops or bottoms.  Rather, we would rally after making a low or sell off after a high and then the next round of selling or buying would be unable to push the market to new lows/highs.  In other words, the most reliable entries occurred after an absolute low or high had been established.  That provided an excellent risk/reward entry, because there was a logical stop out level if the market made a further low or high.

Tracking indicators for each of these opportunities gave me a sense for which ones worked best in slower markets, busier markets, trending markets, range markets, etc.  By grouping the best trades of the day by market condition, I found the best signals for different market conditions, different times of day, etc.  By tracking these best trades going forward, I could also identify the best signals to exit trades under different market conditions.  For instance, it was here that I found the anchored VWAP described by Brian Shannon to be particularly useful in staying in trades and logically exiting them.

What happens when we train ourselves in pattern recognition is that we become more familiar with patterns, more comfortable trading them, and more confident in our trading psychology.  There is no room for FOMO, revenge trading, and impulsive trading if we're grounded in pattern recognition.

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3/22/2026 - For the developing trader, a positive trading psychology begins with a positive *training* psychology.  How we approach our development shapes our developmental path.

It's amazing how many traders recognize the need to follow a trading plan, but don't structure their development along a training plan.  It's like going to the gym and randomly working on various stations and weights.  Are we really going to achieve an aerobic fitness integrated with our fitness of strength and flexibility?  Notice how professional athletes invariably work with professional trainers.  The goal is to get the most from each session--and to get the right things from each session.

Left to our own devices, are we truly going to test and push our limits?  Will we even keep score and know if we're getting better?

A platform such as TradingSim allows a trader to replay a market bar by bar, track relevant indicators, make trading decisions, and see how those decisions work out--all without risking any money.  It is a kind of gym where we can work on selecting the best opportunities, finding the best risk/reward entries, managing risk and positions, etc.  This is especially helpful for day traders, who can practice identifying the kind of day we're in and figuring out how to best trade it.

Notice how this is practice in pattern recognition, but also practice in executing trading skills.  We can track our simulation P/L and identify--specifically--the parts of our game that we need to work on.  Maintaining a positive training psychology--coaching ourselves for progressive improvement--is key to maintaining a positive trading psychology.  Through practice trading, we can practice the skills we need to coach ourselves to success.  

How we learn determines how we perform.

How to Change Your Trading

 

3/20/2026 - In his excellent book The Trader's Journey, Peter Robbins points out that most traders spend their time trying to establish an edge in markets--a "positive expectancy", but spend less time on "the second component of their edge, which is their ability to trade the strategy consistently and accurately" (p. 106).  To change your trading, it's important to figure out whether your rules need adjusting or whether you need to work on the trading of those rules.  A very valuable strategy is to investigate how your rules would have performed in different past market conditions.  Often, rules that work in one kind of market environment fall down when trends, correlations, and volatility change.  No rules work ideally in all market conditions.  That is why it is important to first have metarules that tell you the kind of market we're in and then develop the rules that work in each market condition.  Thus, you will have metarules that tell you when we're in a range market, a trending market, a topping market, a bottoming market, etc.  Each market condition will have its own "playbook", enabling you to adapt to shifts in trading conditions.  When you review your trading, you want to see if you indeed identified market conditions correctly and, if so, whether you made the adaptation necessary for that type of market.

Peter Robbins' observation about the ability to trade the strategy consistently requires that you be able to assess market environments consistently and adapt your trading processes to each market condition.  Changing your trading means first identifying market conditions and then seeing if your rules for trading those conditions:  a) were followed; and b) were profitable, if they had been followed.  Every market day is like a new basketball or football game, requiring preparation for the contest and adapting decision making to the unique opportunities of the situation.  Very often, traders lose money by doing what had made money before market conditions had radically changed.

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3/19/2026 - Successful discretionary trading is not subjective trading, just as successful discretionary medical practice is not subjective.  The discretion of the professional is based upon rules and principles and those rules and principles are based upon research into what is helpful and what is not.  The systematic trader automates those rules and principles; the discretionary trader adds to those rules and principles an element of judgment regarding the immediate situation.  Thus, in my own field of psychology, there is a wealth of research regarding what people need to do to combat anxiety or depression.  It is the discretionary job of the therapist to apply this research in the best way for a given client, keeping in mind what the client is ready for.

So how is this related to how we change our trading?  Many times, we make subjective attempts to assess and correct what we have done, but none of it is grounded in rules and principles that have guided our past success.  Every element of trading process should be rule-based and clearly written out:  What constitutes an opportunity; how much capital should be risked on that opportunity; how trading that opportunity should be entered; how exits should be constructed; how stop loss levels should be calculated; etc.  

Only once we have the various elements of trading process clearly identified can we then go back and see what we did well and what we could have done better.  How can we be consistently profitable traders if we haven't grounded our decision-making in consistent rules?  A big part of the learning process in trading is gaining enough experience, first in practice trading and then by trading small, to create the rules that bring you success.  

We change our trading by first identifying what part of our trading needs to be changed.

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3/18/2026 - In trading, as in medicine, the right course of action to make improvements is to first diagnose the situation.  If we're trying to change our trading, we first need to clearly identify what needs to be changed.  The most basic distinction is:  Do I need to change how I'm finding opportunity?  (i.e., are my ideas wrong?) or do I need to change how I'm trading the opportunity that is there? (i.e., do I need to improve timing/entries/exits/sizing/expression of the idea/etc.?)  How can we figure that out?

The key best practice is to examine closely what happens to your trades *after* you have exited them.  Did your ideas generally work out, or were you right to get out when you did?  Many traders examine their P/L and review markets, but they don't intensively re-view how they got into and out of the trade.  As a result, they're in a poor position to truly know if they need to change how they come up with trades or whether they need to figure out how to better execute and manage the trades they initiate.

There's a principle in positive psychology that, when we make too much use of a strength, it can become a weakness.  That was the case for my trading.  I was so careful about risk management that I exited trades too early.  Many of them would have worked out well if I had let them breathe.  The answer was to initiate trades with smaller size and give them a good amount of room to play out.  Then, when they started to work out, I added a second, larger clip to the trade that had a relatively tight stop.  For instance, if we broke out of a range in my direction, I exited if we reversed back into that range.

This allowed me to get bigger in ideas that were showing promise, and it allowed me to not micromanage my trades.  Most important of all, it changed the psychology of my trading.  I now actually looked forward to my initial position going against me so that I might have the opportunity to get bigger in an idea I liked.  This is a great example of how changing our trading can change our psychology.

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3/17/2026 - I'd like to take a step back and ask a question that comes before, "How can I change my trading?"  That question is "Should I continue trading?"

I recently received an email from the spouse of a trader who was worried about the trader's history of emotional trading, blowing up, vowing to trade better, and then repeating the cycle all over again.  That pattern was taking a toll on the relationship.

Please read the following closely:  I have worked with dozens and dozens of highly successful traders.  None of them has reached their success after patterns of emotionality and repeated blowup.  

None of them.

Yes, successful traders have gone through painful drawdowns and, as we read in the Market Wizards books, they learn from those and turn their trading around.  When risk-taking occurs again and again and again with emotionality and repeated losses, that is not a learning curve.  That is not healthy.  That is addictive behavior.

Do successful physicians learn by becoming emotional and killing one patient after another?

Do successful airline pilots learn by flying emotionally and crashing one plane after another?

Few people will tell you your trading is addictive.  Not the person who wants you to hire them as their "trading coach".  Not the person who wants to sell you their software or their trading seminars.  Anyone who offers to "mentor" emotional traders who blow up again and again is something other than a mentor.

Trading addiction causes trauma.  You can learn more about trading addiction through these articles and links and by asking these questions. 

Changing your trading can mean changing yourself before you ever resume activity in markets.  And maybe activity in markets is simply poison for you and your life and you should find work that makes you feel good about yourself and that helps you do good for others.

The worst trading loss of all is the loss of your happiness and the loss of those who care about you.  

Do the right thing.

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3/16/2026 - How can we change the negative thought patterns that stand in the way of the solution-focused mindset described in the previous post?  Fortunately, research in psychology provides us with ways to shift our mindsets.  Craske and colleagues (2022) describe four exercises that research has shown increase our feelings of happiness and fulfillment.  Those four practices are:  1) loving-kindness; 2) gratitude; 3) generosity; and 4) appreciative joy.  In loving-kindness, we meditate on and rehearse the feelings of love and caring we have toward others.  In gratitude, we rehearse feelings of appreciation for all that we have.  Through generosity, we focus on bringing joy to others and through appreciative joy we find happiness in the joy of others.  Many times, by focusing on who and what we love we can rehearse all four of these experiences.  Spending quality time with my cats, for example, is a way of immersing myself in these feelings.  The idea is to make these four experiences regular parts of our daily life.

There are many cognitive therapy exercises that help us combat negative thought patterns.  It turns out, however, that we can best combat the negative by rehearsing and building the positive.  It is much easier being constructive and solution-focused in our trading if we've been actively positive in our daily lives.  It's also a great example of how building spiritual strengths helps us overcome negative tendencies.  We best achieve a positive trading psychology when we bring positivity to our lives. 

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3/15/2026 - In this series of posts, we'll take a look at what you specifically need to do in order to make improvements in your trading.  These various change efforts, when combined, provide you with a platform for growth that can make improvement an ongoing process.

The first key to changing your trading is to prioritize the changes you want to make and focus on one change at a time.  Change requires concentrated effort, and it requires consistent effort.  When we try to change everything, the odds are good that this is coming from frustration, not from a sustainable plan.

As described earlier on the blog and in the Positive Trading Psychology book, the first step toward change is the solution-focused recognition that the odds are good that the change you want to make is already happening, but on occasions you're not recognizing.  When your trading problems are not occurring, you quite possibly are doing something right and already making the change that you want to see more consistently in your trading.  So that is why it is important to journal and analyze occasions when you trade well and figure out how you did that.  For instance, a more focused preview of markets and preparation of your trading may have prevented you from overtrading.  That is super important.  Once you recognize this, you can turn the focused preview into a consistent daily process.  

The solution-focused mindset is a game-changer.  We don't have to make ourselves totally different.  We simply need to be more consistent in being who we already are at our best.  In the next post, we'll look at how you can achieve that consistency.

Key Lessons From The SMB Summit

 

3/13/2026 - When computers came to the fore, trading completely changed.  I recall the days when I had to phone my broker to place a trade and could only follow the market by calling for quotes.  With computers, the trading process became much more efficient and that led to the rise of day trading and much more active trading.

A topic discussed at the SMB Summit was that AI will lead to a similar revolution in trading.  One advanced trader I work with has already programmed AI with the long history of his trades in different markets and market conditions.  The AI is able to treat his discretionary trading in a systematic way and flag opportunities going forward that fit with his past trading success.  This enables him to track opportunities on many more time frames and many more markets.  That has the potential to make any individual trader an active money manager, benefitting from diversification.

It's silly now to think of an active trader who doesn't make use of a computer.  In the not so distant future, it will be silly to think of an active trader who doesn't trade with the enhanced information sets provided by AI.  Notice how our cars now monitor driving performance, provide alerts, and inform us of needed maintenance in real time--and are quickly getting to the point where they do the driving for the majority of us.  Until now, most of us have thought of discretionary and systematic trading as different things.  But what if we can more systematically trade our discretionary ideas?

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3/12/2026 - One of the topics discussed at the SMB Summit was theme-based trading.  Large market participants often scan news items, data releases, central bank actions, and geopolitical developments to identify themes likely to guide investment in such macro assets as gold, oil, stocks, bonds, etc.  These themes show up in the stock market as relative strength and weakness among particular sectors.  For example, concern over growing economic weakness and the ability of companies to pay their debt might show up as weakness in high-yield bonds and weakness among financial shares.  Doubts about a quick resolution of tensions in the Middle East might lead to continued strength in oil and energy stocks.  

Stocks in play are often a reflection of themes in play.  We can identify the companies and ETFs most likely to benefit from a theme and make those a focus of our trading.  Traders often make the mistake of scanning for stocks that are moving without understanding the basis for that movement.  By following the footsteps of larger market participants, traders can nimbly participate in short-term trends and breakouts.

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3/11/2026 - A major theme at the SMB Summit was the emerging role of AI in trading.  Until recently, AI was used for its coding ability.  If you had a pattern in mind for trading, one of the platforms could readily code it up and track that for you.  What we're seeing now is the AI, and especially Claude, is an expert pattern recognizer in other contexts.  For example, given enough examples of your winning trades, Claude can track the variables that have led to your success (news releases; volume and VWAP breaks; etc.) and signal you when these variables are lining up in real time.  In that sense, AI becomes a real time coach, standing on the sidelines and signaling you when opportunity arises.  Having access to those signals allows you to track more stocks, more markets, and more opportunities.  It increases your trading bandwidth, which increases your diversification.  We're not so distant from a future in which our AI coach evaluates the market environment for us and cues us to the opportunities that we've traded successfully in the past.

Now imagine that you're part of a team and everyone is getting signals for their best trading opportunities.  Suddenly you're trading a great expanded opportunity set.  And what if multiple traders on the team are getting similar signals at a given point in time?  Might that be a great objective basis for our conviction in a trade?

The playbooks of the future will be dynamic real-time guides to trading, grounded in your strengths and your patterns of success.  Tomorrow's successful traders are building that future today.

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3/10/2026 - How well do you mentor your own trading?  If you taught a developing trader with the methods you use to improve your own trading, how well would they develop?  As I described in my talk at the SMB Summit, a thorough review includes a detailed look at what you did well on the day and what you didn't do well.  Those then feed specific goals:  to do more of what you did well and correct where you fell short.

But wait; review is not only about us.  It's also about markets.  We want our reviews to be a true re-viewing of the markets we traded and a fresh look at the opportunities we missed, the opportunities we saw well, and the opportunities we saw but could have traded better.  Each review is thus exercise of our capacities for pattern recognition.  When we see more markets and track how opportunity appeared, we become more sensitive to "setups" for our trades.

Detailed review feeds our learning and is one of the best ways of mentoring ourselves.  This is why sports teams spend hours watching game film, stopping the film, and observing/learning.  Reviewing creates better viewing when we return to real time performance.

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3/9/2026 - The idea of creating "playbooks" that capture patterns of opportunity in trading is central to the SMB traders.  What traders often miss is the need to create different playbooks for different market conditions.  The consistently profitable trader needs tools to tell them the kind of market we're in, because that will tell them how movement is likely to occur.  A calm, trending market trades differently from a volatile one--and both trade differently from a rotational environment and a rangebound, calm environment.  That means that we find different opportunities in different markets, but also trade them differently, size them differently, and manage their risk differently.  Many, many times a trader's frustration is a sign that what had been working is no longer working--and that is a sign that market conditions have changed.

Frustration in trading is often a signal that we need to be following a different playbook.  In that sense, our emotions are information, not just negatives that we try to control.

One of the most useful indicators that I've created looks at the breadth of each sector of the market (the percentage of stocks within each major sector trading above various moving averages--from 3 day to 200 day) and then tracks the standard deviation of that number.  A high standard deviation means that there is great variability of breadth among the sectors; a low standard deviation means that sectors are moving similarly.  Before this most recent drop in stocks, the standard deviation was well over 2.0.  Beneath the surface, the bull market was coming apart.  

Indicators such as this can tell us when we need to be considering switching our playbooks.  If we don't know the environment we're in, how can we possibly adapt?

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3/8/2026 - It's hard to believe that SMB Capital was just getting off the ground 20 years ago.  At the recent Summit, well over 200 active traders from many countries around the world and many states joined in a weekend of learning.  There were lots of hot topics discussed, including AI, the importance of mentoring and teamwork, and the importance of developing "playbooks"--best trading rules and practices--for different kinds of markets.  One of the big takeaways for me was seeing, firsthand, how a team environment creates dramatic trader growth.  Many of the former developing traders who presented are now mentors at SMB, such as Justin Spero, Garrett Drinon, Jeff Holden, Carlton Bryan, and Max Ganik.  From the options trading skills shared by Seth Freudberg to the lessons taught by founders Mike Bellafiore and Steve Spencer and Market Wizards Lance Breitstein and Kenny Sharkness, SMB has become a learning and talent incubator, with many of the lessons captured for all time by Kurt vonWeisenstein.  

One of the points that I made in my talk is that "You cannot achieve world class performance with world class isolation".  In every performance field, from sports to the performing arts, greatness is achieved through mentoring and intensive practice.  That practice has to be structured, and it needs to be accompanied by feedback that helps us identify and build upon our strengths and correct our mistakes.  Even with that investment in human capital, it takes years to achieve world-class success.  Seeing the traders I had known as relative newbies now succeeding as traders and mentors told me, beyond a shadow of a doubt, IT CAN BE DONE!  With the right support and guidance, we can achieve world class performance.  But only when we emerge from isolation and open ourselves to the guidance of those who have been there and done that.

And maybe the best takeaway?  We learn great trading psychology when we learn to trade greatly.  First we copy a mentor and then another mentor and then another and eventually we synthesize all of that into our own market understanding.  That is how I learned how to do therapy:  working with multiple, experienced supervisors and taking away "best practices" from each of them.  Over the course of that synthesis, we develop insight, confidence, and consistent performance.

Seek many mentors.  Copy what they do.  Before long, you'll start putting it all together and become like the former developing traders at SMB who are now succeeding and mentoring others.